A Palestinian policeman was shot and killed by Israeli troops in the Gaza Strip on Tuesday, a hospital official said, the first to die since the announcement of an Israeli-Palestinian ceasefire.

Just less than an hour after US President Bill Clinton announced in the Egyptian resort of Sharm el-Sheikh that Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat had agreed to end the violence, a fierce gunbattle broke out between Israeli soldiers and Palestinians near Gilo settlement in east Jerusalem.

Two Israelis, one of them a policeman, was injured in the firefight on a road used by Jewish settlers near the West Bank town of Beit Jalla, which came under fire from Israeli tanks.

In nearby Bethlehem, four Palestinian youths were wounded as Israeli troops fired rubber-coated bullets and tear-gas on about 100 stone-throwing youths after the funeral of a boy shot dead the day before.

"They are not listening to what Arafat is telling them in Sharm el-Sheikh. What can Arafat do? He accepted to go by force to Sharm el-Sheikh," said Jemilah Khouri, a 70-year-old mourner in Bethlehem.

Earlier, thousands of Palestinian mourners carried the body of 13-year-old Muayyad Osama Jawarish, who was among the latest victim of the tempestuous wave of violence that has swept through the West Bank and Gaza since the end of September.

Masked youths set fire to Israeli and US flags, chanting "Allah al-Akbar" (God is Great), as up to 15,000 people waving banners and Palestinian flags joined the funeral procession and prayers at a mosque in Bethlehem's Manger Square.

As the crowds marched through Bethlehem, watched by Palestinian police on rooftops, there were shouts for the pursuit of the intifada or uprising against the Israeli occupation of Palestinian territories, while women mourners ululated.

In Ramallah town, meanwhile, scene of some of the bloodiest clashes of the past 20 days in which 110 people have been killed and more than 3,000 wounded -- mostly Palestinians --, a Palestinian stone-thrower was wounded by Israeli gunfire.

During the huge anti-Israeli rally at Ramallah, Arafat's Fatah faction denounced the Sharm el-Sheikh summit as a "failure" and warned that the uprising against the Israeli occupation would continue.

"The revolt will continue as long as the Israeli occupation, that is the decision of the Palestinian people," Marwan Barghouthi, Fatah's militant West Bank leader, told journalists.

Residents of the village of Beit Furiq near Nablus, in the northern West Bank, said Palestinian farmer Farid Mussa Nassasreh, 28, was shot by settlers in the stomach while picking olives Tuesday morning.

A Nablus hospital confirmed his death and said three other Palestinians were wounded in the incident. A Jewish settler has been arrested by the Israelis.

At dawn, five more Palestinians were wounded by live rounds, one seriously, in a clash between workers and Israeli troops at a crossing-point between the Gaza Strip and Israel, witnesses said.

And about 1,000 people fired automatic rifles in the air to honor the burial of Palestinian police sergeant Musbah Abu Maahtuk, 29, who was shot dead on Monday at the Rafah terminal linking Gaza and Egypt.

"With our souls, with our blood, we sacrifice for the martyrs!" they shouted at the "martyr's cemetery" in Jabalia refugee camp -- BETHLEHEM (AFP)